SEMICONDUCTOR company Globetronics Technology is expected to post a relatively strong performance for the first quarter to March 31, 2006, due to follow-through demand from the fourth quarter last year, but this may not be sustainable in the second half year, said Avenue Securities. According to the brokerage, Globetronics' share price, which jumped some 39% over the past three months, has already factored in the strong first half year performance.
IJM Corp, one of the largest construction players in the country, was awarded a 30-month contract worth RM138mil to rehabilitate and upgrade the “four laning” of the Jhansi-Lakhnadon section expressway in Madhya Pradesh, India. This latest contract will boost IJM's outstanding order book to RM2.9bil. Mayban Securities said in its report the project was likely to contribute RM11mil to the company's pre-tax profit, based on a margin of 8%. Spread over 2½ years, the impact on earnings would be marginal, the research house added.
INSURANCE player MAA Holdings is likely to stage top line growth for the year ending Dec 31, 2006, on the back of its single premium fixed deposit endowment plan as well as non-participating and investment-linked regular premium policies, AmResearch Sdn Bhd. In addition, demand for life insurance policy will remain strong this year underpinned by the still low penetration rate of 37.9%, growing awareness of the importance of insurance cover, higher disposable income and healthy economic growth.
MOTOR vehicle assembler and distributor MBM Resources, which has 25% stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua), is likely to continue to benefit from the sterling performance of Perodua Myvi after last year's successful launch, said Mayban Securities. Amid interest rates hike and stiff competition, Perodua car sales would remain resilient this year due to the strong value-for-money perception of buyers and the expected regional exports of Myvi, the brokerage said. “The attractive dividend yield at 6.6% is a further reason we are positive on the counter,” it added.
CONSTRUCTION player Ranhill has proposed to buy a stake in Amona Africa Construction Consortium Sdn Bhd (AACC), which was given a contract by the Libyan government to develop residential apartments worth RM3.5bil. It also bought 90% interest in an oil and gas exploration block in Cebu, the Philippines, as well as struck a new gas reservoir under a technical assistance contract with Pertamina in the Jatirarangon gas field. A local brokerage said these developments were positive as they confirmed that the prospects of the group remain intact.